The diamond industry rarely sees developments that feel like a turning point. Yet the normalisation agreement between Israel and the United Arab Emirates — and the subsequent direct trade deal between Israel and Dubai’s diamond bourses — has the markings of one.
After years of discreet collaboration, the pact permits direct flights, and therefore direct shipping of stones, between the two countries. The ripple effect on the industry “could turn out to be much more significant than what it looks like on the surface”, says Tobias Kormind, managing director of London-based online jeweller 77 Diamonds. “It’s more of a good-faith agreement than anything else at this point, but it goes a long way and represents a lot,” says New York-based diamond analyst Paul Ziminsky. “As geopolitical relations ease, it makes globalisation [of the industry] more realistic and easier.”
According to Yoram Dvash, president of the Israel Diamond Exchange and newly elected president of the World Federation of Diamond Bourses, this new deal will stimulate activity and allow for an increase in distribution of goods.
“The industry has been suffering from a lack of profitability, a shortage of financing and reduced demand,” he says. “It needs to transform to meet the demands of the 21st century.” Furthermore, the coronavirus pandemic and subsequent lockdowns have been disastrous, costing the industry 80-85 per cent of its business in March and April, he says, with fears of a second wave also taking their toll.
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